Apple to scale down iPad SC

APPLE   SUPPLY CHAIN    ECONOMIC CRISIS

Global - Apple will be cutting its output of iPad orders by 25% for the last quarter of the year due to weak demand in Europe and an overall unstable economic climate.

JPMorgan Chase & Co revealed this may result in slower sales for its vendors such as Hon Hai Precision Industry Co, Bloomberg News reported.

While affected companies were not listed in the reports, analysts at JPMorgan's electronic manufacturing services team in Hong Kong said this was the first incident where a major manufacturing giant had to scale down its output.

Compared to 17 million units of iPad manufactured in the third quarter, the decision for the cut will cause a drop to 13 million units in the last quarter, JPMorgan reported on the 25 September.

Mark Moskowitz, a JPMorgan US analyst, maintained his prediction of Apple selling 10.9 million to 12 million iPads in the fiscal fourth quarter in an earlier report by Bloomberg.

This reduction in orders to suppliers could also be Apple's operational strategy to work with a downsized inventory, according to Taipei-based industry analyst at RBS Asia Ltd. Wanli Wang.

"It's back to reality. Now it seems even for Apple, due to the market situation, we need to be conservative," Wang said.

There has been no formal word from Apple on its reduction of orders to the suppliers, Wang added, while Hon Hai's spokesman Edmund Ding also failed to offer any comments.

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